Each Wednesday, The Wrap
presents a compilation of recent noteworthy commercial real estate stories from
a variety of publications. Below are five stories that caught our eyes in
recent days.
• “Tech
and Energy Gains Lead Slow Office Recovery” by Robert Carr of National Real
Estate Investor.
Except for in cities that are energy and technology hubs,
growth in the office market will be slow in 2013, according to experts from
companies such as Jones Lang LaSalle (JLL) and Cushman & Wakefield.
Cities like Houston, Dallas, Denver and San Francisco are
showing high levels of office activity, according to John Sikaitis of JLL, who told
Carr that California and Texas alone accounted for 60.3 percent of the
country’s total net absorption last year.
However, the sluggish economic recovery is holding back the
office market elsewhere, with only about 53 percent of the total jobs lost during
the recession having been recovered, according to Cushman economist Ken
McCarthy.
But, “if you’re a tech city or energy city, you’re now
exceeding the peak,” he said.
• “Barnes
& Noble Store Closings Likely as Chain Faces Uphill Battle with Digital
Competitors” by Elaine Misonzhnik of Retail Traffic.
After disappointing holiday numbers, Barnes & Noble may
face store closures as it tries to compete with digital retailers like Apple
and Amazon.com, Misonzhnik reports.
The book retailer reported that for the nine-week period
ending Dec. 29, same-store sales fell 8.2 percent, and even online sales decreased
12.6 percent year-over-year.
Barnes & Noble, trying to survive in an industry that
has fundamentally changed since the bookseller began operations, will need to
start downsizing in the coming months, according to retail consultants Howard
Davidowitz and Jeff Green.
Downsizing is likely to take place in the form of store
closings rather than reduced store sizes, since bookstores rely on experiential
shopping, consultant Steven J. Montgomery told Misonzhnik.
• “Retail
Centers See Modest Growth” by Kris Hudson of The Wall Street Journal.
Despite slight growth for malls and strip centers in the
fourth quarter, experts still say 2013 should be a stagnant period for retail
landlords, Hudson reports.
In the fourth quarter, the average vacancy rate at malls
declined to 8.6 percent, down one-tenth of a percentage point from the previous
quarter, according to data from Reis. At strip centers, the average vacancy
declined 10.7 percent in the fourth quarter, done from 10.8 percent in the
third quarter.
After disappointing holiday retail sales, retail landlords
and analysts are expecting little improvement, Hudson notes.
“If we couldn’t muster good sales during the holiday season,
that doesn’t say much good about sales going forward and how that will
translate into demand” for store space, Ryan Severino, a senior economist at
Reis, told Hudson.
• “RADCO
Acquisitions Illustrate Growing Popularity of Turnaround Deals” by Bendix
Anderson for National Real Estate Investor.
RADCO Cos., an Atlanta-based real estate company focused on
buying troubled real estate and then reviving them, spent the last two weeks of
2012 growing its apartment portfolio by nearly 1,000 apartments, or about 50
percent, Anderson reports.
RADCO’s deals mirror a national trend: apartment investors
bought more than $9 billion of properties for renovation and redevelopment last
year, up from $7 billion in 2011 and $3 billion in 2010, according to Real
Capital Analytics.
“There is a liquidity in multifamily, and the fundamentals
make value-add multifamily the perfect fit for us today,” said RADCO President
and CEO Norman Radow.
• “Nation’s
smallest Walmart to open in Atlanta” by Shannon Mullen of Marketplace.
After spending the past few years working on smaller-store
concepts, Walmart is getting ready to open its smallest store in the country on
the Georgia Tech campus in Atlanta, Mullen reports.
The store will be 2,500 square feet and will feature a
pharmacy, check-cashing services and a small selection of groceries.
Walmart came to Georgia Tech a year ago with the idea for an
on-campus store, much like the one already open at the University of Arkansas,
Mullen notes.
“The 2,500-square-foot space is the only space we have
available,” said Rich Steele, head of auxiliary services at Georgia Tech.